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  CSPAN    U.S. Senate    News/Business.  

    February 15, 2013
    5:00 - 7:00pm EST  

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speaker or the president of the united states or a world leader to speak my mind. i do it respectfully, i try to do it without unnecessarily, but i do not believe i've ever withheld my honest view from the president and as the secretary of treasury i would be called upon and more circumstances to sometimes come in with hard messages. as the chief of staff, it turns out you don't go to the president with a lot of good news. over a year i had to walk into that oval office every day and tell the president there were tough choices and here's what i think, never mixing my words, never not saying what i think. as the treasury secretary, i would follow that kind of half and i would hope to work with this committee on a bipartisan basis to have the relationship we could talk to each other that way. >> i was getting at something else. it's clear that you could be a great stafford. i'm not talking about a great
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courageous stafford and telling the president what you think that don't think. i am talking about something else. i am talking about the public perception, the public demeanor representing the united states around the world, across the country and around the world and it will influence policy in a way that makes sense that most of us tend to agree with. it would be different around the edges but everyone in the room agrees that it needs to be done. that's what i'm getting at. what can you tell us about that? >> i think that. one of the as the white house chief of staff i met with both world leaders and heads of major interest groups in the country. the way you carry yourself in that position as where the gravitas comes from. i feel like in the business dealings that i've had it is building a trust.
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it's about having her credibility and speaking clearly and saying what you think. i have done more than my share of public speaking and appearances and i'm not afraid of taking issues public and expressing complicated ideas people can understand. i'm not sure how to put a specific question behind gravitas but i think the career path i've had very few people leave the role of the staff and become a member of the cabinet. i've had a path that is not the normal and that lends itself out. >> i wish you well because -- >> do you need a break? >> i'm fine. thank you. >> just want to make sure because unfortunately this is one of the most important solutions and the country and this is going on all but longer.
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it's 22 minutes or two hours. >> thank you. we understand. senator rockefeller raised the issue why they have such a hard time raising revenue. they won't use it to pay down the national debt which is astronomical but if we tax every dime that millionaires make but the deficit will become an excuse me. we have seen it time after time after time but we do not have any faith devotees would be used to get the spending under control and the government under
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control. that is one of the reasons i think the republicans are so loath to raise taxes. the fiscal calamity is primarily driven by the exponential growth of entitlement spending. we know that is a problem. you know it is a problem. second, there are economic costs to the tax increases. tax something, labour capital, entrepreneur should come and you are going to get less of it. they are impractical what mr. the design a tax increases on whatever the unpopular group is that's targeted if so like i say these are problems we as republicans have and their legitimate concerns and i'm sure you have legitimate concerns about these things as well as we do frankly you've done very well today and i have a great deal of
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respect for you. it's not easy to get a lot of times and service as a stafford and then a director of omb and top staff and the white house. people like you that give yourself to the government and i have great respect for your wife and your daughter and your family, too. it's tough. >> i think we don't give our spouses nearly the credit that they deserved. some of these questions we do need to ask to make sure that the record is clear. let me ask one and hopefully make the record more clear. they have over $45 million to citigroup in early 2008 and 2009 they have that hundreds of billions of dollars you'd
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reportedly received over $940,000 of compensation. in early 2009, mostly comprised of discretionary compensation for work performed in 2008 and received that a day before city received $7 billion of taxpayer backing. january 29, 2009, president obama remarks on wall street bonuses at the time and said that is the height of your responsibility. it is shameful. he went on to say there would be time to get bonuses that now isn't the time. elsewhere he referred to the bonuses as, quote, obscene. you wrote in a 2010 letter to senator grassley that, quote, the compensation laws in line with other management executives at the firm and similarly complex operations. that seems a little bit to me saying everyone is doing it.
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unfortunately that kind of reasoning is exactly what led to this financial crisis. three questions related to the compensation let me give them to you and then you can respond to all three. first, can you explain what you did in 2008 that was close to $1 million most of which was a bonus? second what was it about the performance that merited the company that was being propped up by the taxpayers money and are there any records of the performance assessment or are there any assessments of the performance? third, the employment agreement included your guaranteed incentives and retention award wouldn't be paid upon exit from citigroup but there was an exception that he would receive that compensation as a result of your acceptance of a full-time high level position with the united states government or regulatory body come end of quote. is this exception consistent with efforts to close the
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revolving door that carries special influence in the government that has to be asked and i would appreciate hearing your response. >> senator hatch, the work that i did in 2008 was running the business of the business in the year when the financial products for not doing well. i think i performed quite well managing the business operations, shedding real estate and parts of the operation that were not necessary, reducing the cost in a very considerable weight. i am not familiar with the records that were kept. so why don't have access to things i don't know about. the experience i had in the private sector has given me the perspective that enhances my ability to perform both intervals of nine nominated for.
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the practiced law in the university and the financial the institution. i think that if i hadn't had a sort of experience like that, i wouldn't be sitting here today speaking with confidence i could undertake the responsibility as the secretary of the treasury. as far as my compensation goes, it was for my work in 2008. i do believe it was comparable to the compensation for positions like mine in the industry and it's a broad discussion on the compensation, but i don't think that there is anything that has not been fully transparent about what i did and what i earned. >> can you tell us how much money you made in 2008 before you got the bonus? >> am i base salary was $350,000. >> thank you. it is a question that i thought had to be asked. i appreciate your answer. go ahead, mr. kernan.
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>> thank you mr. chairman. i thought the question posed by senator baucus was interesting and i was on the other side. the question senator hatch has posed earlier and the secretary of the treasury there are rules having been a staff person i've had the same balance that you will be facing the the treasury is different. i think it is a different job than the chiefs of staff of the context of what the ranking member and the chairman were talking about and it has to do with taking the public positions. it's not about meeting with foreign leaders or president, it's about being willing to have
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the courage of your convictions and to talk about these issues and a time when the country's in trouble and i think that we are in trouble in our levels and the weakest recovery that we've had in our history in terms of getting out of this economic doldrums and i think that it requires the secretary of the treasury because i think that this is quoted as saying from senator hatch no more responsible positions. this is it. we talked about tax reform earlier and i have three quick questions for you which may be the kind of questions we need to fix from china to do the right thing. this gives us information on what's going to happen in the future. they have said that over the next ten years would double the cost so you have a 100% increase
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on 3 trillion in these programs over the next ten years. during that time other entitlements are going to go up 39% and the spending only 10% so it is very clear it's not the biggest part of the problem now, it is the fastest-growing part of the problem and it's an incredibly important program but they are not sustainable in the current form. by the way the other thing that is causing a problem in the deficit is the interest payment and they've told us that in the next ten years or interest payment is going to go up 284%. the bulk relates to the increase in spending on the entitlement side, which encourages us to borrow more so the question is the obvious one are you willing to take this on and the president has talked about a lot. he has even said and like what he refuses to pass this problem on to another generation of americans. but so far that is what the administration has done because of the few changes that you have proposed in your budget, which haven't got votes from democrats or republicans are just around
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the edges. so, my question to you is are you willing to step forward on this and show the kind of leadership the senator is talking about and he may be talking about other leadership that he agrees this is a challenge we face if you can answer that question with regard to entitled reform. >> entitlement is a big part of that pla i think that we look at the project three and the gap between the revenues have come in a program like social security and it is not the entirety of the program but it's a gap. social security is 70% funded by the payroll tax. we need to deal with that. >> $9 billion this year. >> protect social security and a balanced and fair way. i think if you look at the arc of my career whether it was 1897, going and presenting the agreement that senator domenici and i worked through together on
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the balanced budget agreement going to the democratic caucus in the house and senate presenting it come advocating it, winning support, that wasn't easy, was a code of conviction. >> it's not easy. >> it's not easy. i think if you look at the current debate, and senator baucus knows the saigon before the senate democratic caucus many times telling people what i thought they needed to be told even if there wasn't a popular thing at the time. i agree we may disagree on a certain policy but things i agree on i never, never withheld my judgment and have driven it as hard as i can to get the job done. i would continue to do that. would be a broad set of issues and playing field. that's clear. the thing i would say that is different about treasury, it is a job that requires one to transcend politics in many respects. >> that is what senator baucus was getting at in the comparison of the solicitor general's office. i understand that and i am
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looking forward to that. >> be for the sherman tells me that his time is up, because quickly, not to have the ability to negotiate trade agreements mix it difficult to take the president up on his challenge for us to have a european u.s. free trade agreement of some sort and also to complete the partnership because of the ability my experience in the country isn't willing to put their lives on the table this is the first administration since fdr not to ask for the authority to the decline of one and online to are you willing to ask us to get you and work with this ways and means committee so we can indeed make good on the president's commitment? >> senator, i tried to work to advance free and fair trade at times when it was extremely unpopular. i worked to make sure we didn't have protectionist policies in the late 1970's and the early
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1980's. i worked in the clinton administration and the obama administration and i shaped it when i was at the state department. i think it was a great announcement president made with europe and by the look forward working with you and the members of the committee to have a free and fair trade that expands the market. >> would you be open to -- >> i would be open to the discussion that still has to take place on that. i would certainly engage on it. >> my last question is a written question. thank you, mr. chairman. >> it on their retirement savings. we have a question posed generally earlier by senator cardin come and the committee has worked over the years of the ways and means committee starting in 2001 to expand their retirement savings and the theory has been if you can get more business to offer a 401k plan and get more people to take up the ira did you can expand people's ability to save for their retirement to take off the pressure on the social security.
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some of us are concerned that sometimes the administration seems less committed to that going forward in 2006 as you know the congress chose to make that part of the permit so the expansions that occurred are in place. the question for you today would be are you committed to the private retirement savings approach and specifically do you think the 401k works and do you think should be an important part of savings and social security for people's retirement? >> i think they work better for people with high year in of the income scale than the load of the mill end of the scale and we need to look at ways to get people to participate more in savings plans. it's harder when you're spending your disposable income to save. there is no doubt about that but there are things we can do to make it easier and more attractive and i would look forward to working with you and other members of the committee. i do believe we need a three
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leggitt stultz. >> we want to work on just one point quickly unless you provide that incentive to that small business owner to provide a plant in those workers who are concerned are not going to have the alternative to be able to save for the retirement plus a matching contribution a ski as you know so we hope he will work with us on that to expand their retirement savings that gets more small businesses, not fewer involved in providing that great opportunity for the piece of the retirement. thank you, esters chairman. >> thank you, senator. >> i appreciate your comments and i think that you're opening statement also answers the question that you want to pursue order in the comprehensive tax reform which on the business side is broadening and reduction in your world did their with the
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base broadening and the potential reduction depending. i just want to say that this committee is going to act very forthrightly in pursuing the reform in the regular ordered. that is with mark up legislation and ensure that i speak for the house ways and means committee on their preference to speak for both sides of the all because the finance committee and many other house and the congress want to pursue the tax reform and the same way and much the same way that we did back in '86. it was wide open, free amendment offered it is true that in some degree to the began with treasury one, treasury to and it's also true that both bodies were engaged and involved and
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found a solution in this committee and report to the bill unanimously all members supported it which was not have expected early on, so i appreciate your not only your willingness that your enthusiasm working with the congress under regular order with of the committee doing their work. i do think that is a good vehicle who to address growth and jobs. >> i don't think there's any other way to accomplish it. it's too complicated and it has to be done with people with expertise and if confirmed i would look forward to being a partner. >> thank you, senator. >> i agree we need to do tax reform and we need to have you weigh in heavily and we can do it in such a way that really
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does increase cost growth in the size that we are in. i would just make one other comment i think that you have to weigh in. it's ridiculous this is the only thing in my memory that hasn't asked for that power. it's just a great power for the press so that you don't have to have a two-thirds vote in the united states senate and trade is going to be one of the best ways we can pull us out of the mess that we are in to create the manufacturing jobs with the president suggested he would like to do last night, so i think you are highly respected in this administration and by many of us and i believe that if you will weigh in that is something that really has to be done and we get into a mass appeared so the majority vote becomes a real cost and the
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united states and that he and we but like to avoid that and see free trade go much faster and much better than it is. most nations in the world in the free trade agreement we are being left out in the cold at the time so we need the jobs and the opportunities and the unions need the jobs getting more and more jobs and more and more chances to organize. so, all of that fits together and i just encourage it or way in because i know the president thinks very highly of you or he wouldn't have put you in this position and that would be my counsel to you and i just want to thank you again for appearing and being willing to answer these questions and frankly i think it's been really well. >> thank you, senator. >> i just want to emphasize i don't think this administration has been as aggressive but pursuing the agreements as it should.
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be honest they were not in favor of it at the beginning at all. that was short-sighted. we need them to engage in the city. the administration was dragging its heels at best. >> also i was heartened to see the european countries want to pursue the trade agreement with the u.s.. i might also add that it is a good opportunity to write a kind of trade authority and the provisions in the 21st century to move us forward rather than the standard variety, so lots of opportunities here, lots of opportunities, and i know that you will pursue them all but i
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just urge also he worked mightily to find a way for both of the avenues to work together. it's not just congress because that's the way the founding fathers set this arrangement up and we have to make it work. >> i look forward to doing that with you, sir. >> this is a tough job. elbert said it was, and i agree with him. good luck. the hearing is adjourned. [inaudible conversations]
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[inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] [inaudible conversations]
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.. the event took place at the american medical association
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national advocacy, and that the grand hyatt in washington d.c. card mark [applause] >> well, good morning, everybody. it's really nice to have a chance to be that way if ama and i want to start by thanking dr. lazarus and congratulating him for his leadership this year. say hello to dr. madeira, your ceo whoever chris for a number of years and recognize following knee this morning on a piano, you'll hear from one of your former leaders who we get the opportunity to work with each and every day, that nancy nielsen, a former ama president, who is now part of our centers for an invasion, hoping to promote and drive a lot of the
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very exciting work going on in the delivery system and also hopefully throughout the course of the day you have a chance to talk to dr. mandy cohen, a great health later at hhs who does a lot of outreach with the physician community. i told dr. lazarus as i was coming in, i think it is a very opportune time to have a psychiatry sleep the ama. the law may need his personal help and support, but also, i think the country is behind for an important dialogue. there's no question the reason tragedy in newtown broke the hearts of the nation, but also gives us an important opportunity to address issues that have gone unaddressed for too long. gun safety and mental health issues, often behind the shadows and not discussed.
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in the next two weeks, education secretary, arne duncan and i will be launching a pilot and the ending the silence around mental health to keep so many people from getting the help they need. i know the ama has 30 participated. you had one of your numbers by the vice president and it sent a letter to the president and congress, offering your expertise as our nation grapples with these issues. dr. lazarus, i know you and the ama will help lead this conversation across the country. tonight, you're going to hear from the president about a number of things and certainly progress in health care transformation is one of the issues he plans to address. but this morning i thought it would focus my remarks particularly on the health care system. and today i am pleased to report that the state of american
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health care is getting stronger thanks in large part to those of you in this room and doctors across the country. just consider some of the changes we've seen in the past few years. around the country, physicians or adopt the new models of care and greater numbers than ever before. 250 health organizations, many of them physician led have agreed to form accountable care organization and are serving more than 4 billion beneficiaries, testing different models of care. last month, more than 500 hospitals and other health organizations agree to participate in an initiative that will test whether receiving a single bundle payment for an episode of care can really improve coordination between health care providers. similar models of care transformation are spreading rapidly in states and in the private market. these transformational models
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are no longer isolated. they are becoming the face of american medicine, aiding the transformation is the accelerated adoption of new tools of sharing health information. since 2008, the number of office space doctors using the basic electronic health record has doubled, spurred in part by incentive payments and technical assistance from our department. a development which has huge promise to reduce medical errors, facilitate better care at lower cost. most important of all, the changes are already translating into significant measurable improvements in american south. central line infections are down more than 30% since 2008. hospital admissions and medicare have fallen dramatically in the
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past year, resulting in an estimated 70,000 fewer patients returning to the hospital with dangerous and casa complications. as part of a new affordable care act initiative, clinicians at some hospitals have reduced their early elected delivery to close to zero, meaning fewer high-risk newborns in fewer admissions to name a few. meanwhile, we have achieved three consecutive years of historically low growth in underlying health care costs. and there's growing evidence of slowdown isn't just a result of ongoing economic recovery, but a reflection of a fundamental transformation in care delivery happening across the country. america's doctors should be enormously proud of his achievements. it's true the affordable care act and other legislation have helped speed this transformation , but really it's been health care providers,
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doctors and teens who don't artwork improving care episode by episode, patient by patient, organization by organization across the country. because of these efforts, a daughter who might've passed away from a hospital acquired infection is in school today. a grandfather who could've been stuck in a hospital bed is eating his breakfast at home. a newborn is plain in her room instead of lying in a neonatal icu. and that is what you hope to accomplish. i understand that the change is not easy and most of you don't exactly have a lot of free time. even improvements that save time in the long run like a rating to digital health records can be enormously labor-intensive at first. and i also know we have a lot to learn about these new models and we look forward to hearing from
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you. the american health system has evolved over decades in ways that perpetuate fragmented care for acute illness rather than coordinated care across settings. as we transition into an era of integrated patient centered care, it's inevitable there will be some growing pains. but i do think moving forward is the only option. the health needs of the american people are changing. patients today are living longer. they're more likely to have chronic illness that requires careful management. they're more likely to have multiple conditions that require coordination between physicians and other professionals. they often want more control over decisions about their own care and to be successful, our health care system must evolve to fulfill those needs. we also have to cut health care spending on a sustainable area.
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it's health care costs continue to rise unchecked, will eventually reach a point for drastic cuts are needed that will harm both patients and doctors. and especially now as fiscal issues move to dishonor of the national debate, it is essential to have health care costs and cut costs to provide a research ship costa beneficiaries are private payers. assures that we have today is not whether our health system will evolve, but when and how. it is whether to change now we can take a thoughtful planned approach to learn from our mistakes or whether to wait until it is too late and a far pointer to purchase needed. i believe thoughtful planning his past and it's why i am so grateful to the ama for leading
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the way on improvement. it's also why i'm here today to challenge each of you to do more, to help us accelerate transformation of health care in this country. if you're part of a provider organization participating in a new care model, let us know how it's going and how we can support your efforts. help educate us about what is working and what isn't so we can hope those insights into our policies and incentives. if you've been waiting to get involved in a new model, now is the time to take the leap. we know there is no one-size-fits-all approach to modernizing health care and we are committed to creating opportunities for health care organizations of all shapes and sizes. everyone can do something, whether it's pushing forward on patient safety are investing in electronic health records could help you better coordinate
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treatment. what i'm asking ultimately is for all of you to be leaders, whether you work for a big hospital, nonprofit or for yourself, taking responsibility, thinking about health organization can do better has never come at a better time. in return, my pledge to you this morning is that our administration wants to continue to listen to you and respond to your concerns. for example, when physicians call for new medical malpractice models that can improve patient safety and bring him liability premiums, president obama became the first chief executive in history to direct us to use our authority to provide funding for that after we've had models going across the country. and please to tell you will have a fuller report in the next few months. we have some very promising results from these models being
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scaled up in various parts of the country, many of which were developed, modeled and implemented by physicians. another example is accountable characterizations. when we release the first proposed pco rules, we received feedback, some of it not very positive from the physician community. much of it taught us that the rules came up short and you mentioned a few specific areas. you told us we needed to reduce the reporting burden, so we did, cutting the number of quality measures by half. you tell us they had to be an option for smaller organization they needed help with startup costs, so we agreed, creating the advance payment model. you told us we needed to create pathways for providers who wanted to take on less risk and again we responded to that request. i think results speak for
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themselves. not only do we now have hundreds around the country, that they really reflect the full diversity of america's health care system. from major academic medical centers to health clinics to position not organizations and that would've never happened without your input. our department has tried to respond to your concerns about how to balance the need for measurement and accountability with the growing administrative burden on doctors. that's why we said doctors will now be all to report one set of results for meaningful use in the position value modifier instead of using three different size. it's why we continue to proactively look for opportunities to slash red tape, including reforms the secretary of agriculture tom vilsack and i announced last week that's estimated to save health care providers particularly in the
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rural areas nearly $700 million a year. finally, we've remained committed to an sgr fixed i'll take america's doctors said at a permanent of limbo. [applause] long overdue. i see it now, the recent fiscal cliff deal signed by the president extends through the end of the year, but he and i both said as the beginning of the term, temporary extensions are not good enough. we need to bring an end to the constant uncertainty for doctors and patients. ultimately only congress can pass a permanent fix, but this administration continues to be committed to doing what we can to make that happen. as slavery or the president has been in office, his budget has included a long-term fix and it's why we continue to work with you in congress during this
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critical year for budget conversations that include the sgr fixed. we continue to believe congress can and should take action to avoid sequestration cuts scheduled to take effect in just a few weeks. the way those impactor department or that medicaid and shift programs are not affected by sequester costs. they are held harmless. other programs across the department will be cut for medical research to personnel and health clinics. medicare cuts after 2% are scheduled to take place beginning april 1st. i would cut provider rates across the country. that's where the president continues to call on congress to prevent indiscriminate cut that would hurt families and doctors
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and certainly would do great harm to our economy. it is important to realize that preventing this devastating cuts is just a first step. unless we come up with a credible plan for reducing health care spending going forward, we will ultimately end up in the same place at the other costs equally blunt and other approaches to cutting costs that don't make any sense. as her more accelerated for care needed. i know the ama is put forward a plan to do just that. it's encouraging to see recommendations for reducing unnecessary care, advanced by specialty societies and choosing wisely. physicians need to continue to play a major leadership role. your leadership also goes not only to the transformation part of the new law, but the second
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part of the law, which is expanding access to affordable coverage to more individuals can access care from the outset. this is a goal that the ama and america's doctors have supported for decades because you better than anyone understand consequences of going without health insurance. you see it in patients who don't fill prescriptions he wrote because they can't afford it. you see anyone who shows up at the emergency room with consequences from cancer that could have and should have been caught early. pcn families saddled with medical bills that they'll spend their entire life trying to pay off and you see it in the burden that many of you take on day in and day out to provide care to the uninsured. the uninsured americans in this country have never been invisible to america's doctors and that is why you help in the
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fight will finally bring america into the ranks of nations that make coverage affordable to all their citizens. because of your efforts, beginning october 1st of this year, millions of uninsured americans will qualify for a health plan to fit their budget. either through new state marketplace or expanded medicaid program. about half the states have already said they will expand medicaid and many others are still deliberating. you can help make sure those debates are informed by facts about what coverage means for people's health, what it could mean to the local economy come at the bottom line is for health care providers. no one has better credibility speaking about what is best for patients and doctors. so make sure your voices are heard. you can also help educate people about an insurance options coming.
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as you know all too well from personal x variants, dealing with health insurers is not exactly a favorite thing to do. for many americans come health insurances can using, frustrating, something people want to avoid thinking about until they have to. but again, you and a lot of people around you and your teams can be messengers to help educate her parents, family members, friends, neighbors about their coverage options beginning this october. a great place to start is their website at health care.gov. it has some clear information about the law, who is eligible for coverage and how people will truly get started on october 1st. as i mentioned earlier, i hope you'll continue to one boy says about how we can come together as a country to prevent tragedies like the one we sought in newtown.
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we know there is no single solution to the problem of gun violence, but we all can agree is the president called out recently that physicians should talk to patients about guns and about health safety. we can also agree that we need to talk as a society that mental illness, stress, crisis and what else may be available. as i said earlier, will launch a dialogue about communities and their work to promote that her emotional and create environments for young people and families feel comfortable asking for help. and i'm counting on doctors to the community conversations. the care you provide for patients will always be your first job. today there's many other ways for not yours to make a difference in people's lives,
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starting with contribute to transformation of our health care system. we've made great progress in the last few years. i look forward to working on that progress in creating a health system that patients, not yours in this country deserve. thank you offer what you do each and every day. [applause]
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>> up next, the agricultural committee looks at the impact of lester's extreme weather conditions on american farmers. nobel prize winner, robert pulwarty says this year will likely be drier. farmers also testify to the hearing as chair debbie stabenow called for a passage of five-year farm bill. >> well, good morning. the committee will come to order. we're so pleased to have our first session this year and
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we'll talk about our new members and no one. while we have a quorum, proceed with business meeting that we need to have in order to officially organize the memo precedes. it's good to be back with all of you and proud of the work we did this last session and i know we will be began in terms of getting things done by working together. seeing a quorum at what cost order a business meeting the committee on agriculture, nutrition and forestry. the purpose of this portion is to organize the committee for the 113th congress. all members have a copy of the rules which remain unchanged unless congress is also committee assignments for this congress and a motion would be in order to adapt the rules in a percept committee assignments. >> madam chairwoman, i moved the committee rules and subcommittee
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assignments be approved. splenic thank you very much. is there a second? thank you very much. all those in favor say aye. those opposed, nay. the eyes have it. we typically approved this session, but we are waiting for further guidance from the rules committee and leadership so once we have that will have another business meeting to officially approve the budget resolution. having concluded business, we returned to the hearing and thank our witnesses for their patients. so good morning again. it is in fact my pleasure to call to order this first meeting of the committee and first of all we don't see senator roberts here, but as ranking member of the rules committee, we wish him best in this new assignment. i am very pleased to welcome our
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new ranking member, senator cochran, who is no stranger to this committee, who was sat in this chair and we appreciate -- that must be interesting and feeling to be as we have for a number of members, senator chandler says well to serve in a number of capacities. we are pleased to have the expertise of senator cochran joining me as a partner and leading the committee. we appreciate servicemen and day. we also are welcoming three new members to the committee. senator don money, senator heitkamp, senator cowan. we welcome all of you to your hard work from the committee. we all are very interesting committed to agriculture. it's great to have you with us. moving to the hearing topic,
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nobody feels the disaster is what our nation's farmers and ranchers as we all know, whose livelihoods depend on getting the right amount of main, right amount of sunshine, getting it all together the right way at the right time. all too frequent leigh, an entire season's crop can be lost as we know or an entire herd must be sent due to the lack of fee. 2012 was a year of unprecedented discussion from drought, freezes, wildfires, hurricanes and tornadoes. including tornadoes that hit mississippi and other parts of the southwest weekend in my heart goes out to survivors of those devastating storms. our country experienced two of the most destructive last year. we experience the warmest in a
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contiguous knighted states, coupled with historic drought produce conditions that rival the death toll. wildfires raged in the west in the northeast, warm weather and march castries to book early, resulting in total destruction when temperatures drop down in april and we certainly were hit hard with that in michigan. california and arizona experienced a freeze my son, threatening citrus, strawberries, lettuce and avocado. berlin last week our inventories are the lowest in over six decades, which is a broad ranging impacts in rural communities is processing facilities and feet thoughts. the drought has left many waterways with dangerously low water levels. lake michigan, laker out has
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that there'll 10 lowest water levels barge traffic on the mississippi, our most vital waterway has ground to a halt. resent distractions and increase cost for commodity and fertilizers. today we are the national oceanic and atmospheric administration and department of agriculture about the disasters he faced last year. we also hear directly from those affected by disasters. thanks to a successful insurance programs, many farmers will be able to recover their losses. for those farmers who do not access or the other risk management tools we work so hard for is less certain. every farm bill that gives a certainty, we ended up with a partial extension that creates the haves and have-nots. though crop producers participate in insurance, not
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only get assistance from insurance, which is essential, but some will continue to receive direct payments as low regardless if they have a loss. meanwhile, many livestock reducers who suffered substantial losses won't receive any assistance. we all know farming is the riskiest business in the world and all together and play 16 million americans. this is important. mother nature certainly made sure we didn't forget the fact service gives business/year. we need and we know because we are committed on this committee, we need to give producers tools to manage the risk from those weather events and other risk for me to get give an certainty so they can make plans for their businesses. that's why we are committed to work together to lead the way in passing a five-year farm bill. this committee did not shrink
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from its responsibility last year, nor will we face here. we did our work, came together in a bipartisan way to pass a bill like a certain teacher rural america while reducing our deficit. to protect against disasters as well. i want to thank my colleagues for the work we did last year. working together, i am very confident that we will again come forward with a farm bill that provides certain teacher rural america that is desperately needed. i would now like to turn to my good friend and ranking member, senator cochran for his opening remarks. >> madam chair, thank you very much. again, i am pleased to join you in welcoming members of our committee to our initial hearing and meeting today. we are here to learn more about how we can respond to the
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drought and other disaster events of recent years. for that to express appreciation to members of the committee and especially to members of our staff who are working to prepare for hearings such as this in meetings so we can respond to the interest of american agriculture in an efficient, thoughtful and understanding helpful way. it's an honor to serve as ranking her of this committee. it has a great tradition of service on its membership from leaders of the senate and go back all of my lifetime. it's of course decorated with portraits around here. and what you don't to be dead with your picture on the wall. that's a nice touch. but we are here to learn from
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our witnesses, so i'm going to ask my full statement be printed in the record and expressed the hope again that our good work can result in a stronger bus safety net being created for farmers. that's important to the united states economy, tour producers, our exporters. we can gain from today's witnesses, ideas and suggestions about how we can improve our response to these means and appreciate all of them being here to work with us in this regard. again, i'm looking forward to working with you in the committee stood for in the 113th congress. >> thank you very much. we have a group of excellent panelists today. i asked the members opening statements be submitted for the record ever to members, we recognize senators based on order of appearance at the
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committee alternating sides. before introduced the first panel, with a two -esque in its consent to enter items into the record. testimony from national association of districts and the official record and i can come a letter from the u.s. cattlemen's association. if there's no objection, we would enter that into the record. thank you. welcome again. we ask that you keep, as you know, our two witnesses now keep comments to five minutes, but we welcome your extensive written testimony to be shared with us as well and we are very pleased to have two very important experts with us. our first panelist, dr. joe glauber is no stranger. he's the chief economist at the united states department of
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agriculture. dr. glauber served a usda from 1982 to 2007 and was named special doha agricultural envoy and continues to serve as chief agricultural negotiator in the doha talks. our next witness is to a roger pulwarty. i will turn to senator bennett to introduce him as well. >> i think the people of colorado for holding this incredibly important hearing. they been afflicted by both drought and fire come as a thank you for doing it and i'm pleased to introduce dr. roger pulwarty to the committee this morning. dr. pulwarty comes to us by way of boulder, colorado where he works on the national oceanic and atmospheric administration. he serves as chief of the climate and societal
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interactions domitian. his past research and publications have focused on extreme weather in disaster risk reduction in the western united states, latin america and caribbean. dr. pulwarty has testified before congress before. his appearance is focused on climate change, water resources and climate adaptation. from university and received phd at boulder. my chair, thank you grenache for allowing to testify today. >> before hearing dr. johanns is doing double duty and a couple of meetings and wants to recognize someone on our second panel. senator johanns. >> thank you, madam chair for this courtesy. ..
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he is actively engaged in his community. in addition to the farming operation that he is involved with, he is on the president's advisory board committee and the state county extension board. given all of his experience, i think he is going to add valuable testimony and i will
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just wrap this up today and thank you and the ranking member for holding this very important hearing. >> make you very much. we are actually going to start with doctor pulwarty today. and we will turn to doctor glauber. doctor? >> [inaudible question] [inaudible conversations] >> i am so glad to be here today. thank you for inviting me to speak. drought is a part of the american experience from the events of the '30s and 50s to the present rate from 2000 until 2010, the average annual land area affected by a drought was 25%. prior to the two thousands, the number stood at 50%. 2012 and it is one of the driest
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years on record, having had five months in which over 60% of the country was moderate to extreme drought. it was also the warmest year on record. only 1934 had a moderate to severe drought, and it was also a one year. drought conditions continued across the nation. the cost of the 2012 drought is in excess of $35 billion based on agriculture alone. however, it is important to note the drought related impact across the broad spectrum, from energy, recreation, to wildfire impacts. according to the fire center in boise, over 9 million acres burned last year, which has only happened twice before in the record. 2006 and 2007. since 1960. low river levels on the mississippi affected transportation of agricultural products. as many of you know, half of the transport on the mississippi
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river is agricultural. eighty feature of conditions was the dryness and warm temperatures, the magnitude of the extreme and large area that it encompassed. figure one, which you have in front of you, shows the figure of 2010 until the present. about 32% is in moderate to exceptional drought. it intensified in the midwest and it covered 60% of the country, from the valleys to the rockies and the mexican and canadian borders. several states had dry seasons, including arkansas, kansas, nebraska, south dakota. the drought years of 1955 and 1956 have the closest geographical pattern to what we have seen to date, in the year 1998, the second warmest year on record, 2006, they have a close temperature pattern of what we
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have seen. as of this morning, a this depicts the present conditions of what people have in front of them. but we are pointing out as the drought continues across many parts of the midwest and the west great it is linked to temperatures in the tropical pacific and atlantic oceans. as you can see, from the last figure on the u.s. drought monitor, a dry pattern is expected over the next three months over the south and the midwest. prospects are limited for improvement, including western nevada and arizona. the drought and warm temperatures in the midwest are firmly entrenched into the month of february. they have seen a greater need for above normal rain to recover. this area is becoming the epicenter of the 2013 drought. despite some relief, much of the
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apalachicola chattahoochee river basin remains under extreme drought conditions, including low groundwater levels and georgia is in its driest year on record. local levels have increased as far as effort, and it results in a strong multistate and multi-agency partnership. in december of 2012, we drew on these partnerships and had a national drought form in washington dc. the goal of the forum was to understand the extent of the impact and response for improving the drought readiness for 2013 and into the future. this was cosponsored by the national midwestern, southern, and western governors association, federal agencies, and regional and local partners. it highlighted the need to increase public awareness of this year's drought and potential future impacts to increase the technical
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assistance for using drought related information in those local and rural impacted communities, and ensure support for monitoring data, such as efforts led by the usgs. we are working on this national recovery effort and this revolves around a recently signed effort by congress. we are increasing public awareness of available information and transferring successful approaches to early warnings, those that do not have the systems yet. to improve the predictability and work with the private sector on developing a better system. all of the information of this testimony is drawn from federal, state, tribal partners, including noaa, the national drought mitigation center,
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university of lincoln nebraska, the usda and others. thank you for the opportunity to be here today. >> thank you very much for that sobering information. doctor glauber? >> thank you very much. chairwoman and ranking members of, thank you for is letting me speak at today's hearing. the u.s. agricultural economy is strong and in aggregate, farming measures are at record highs. however, aggregate measures comprised of differences in sectors. we have done the best we can despite high prices due to the drought and protection from the federal crop insurance program, which has helped offset many of the yield losses. furniture producers, or producers of crops for which insurance is unavailable, crop losses have had a more adverse
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effect. livestock producers experienced high feed costs and poor pasture conditions this year with limited programs to pull back on, including key disaster programs authorized under the 2008 farm bill are currently unfunded. what had started out as a promising year for u.s. crop production with favorable planting conditions, supporting high planted acreage is and record or near record expected production, it turned into one of the most unfavorable growing seasons in decades. crop production estimates throughout the summer declined. by january of 2013, final production estimates for corn were down almost 20% from the may projections. start him was down 26%, soybeans fell about 6% over the same period.
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roughly 85% of corn and wheat and soybeans and 90% of cotton is typically enrolled in the crop insurance program. for those of you who weren't around back in 1988, this contrasts sharply with what the experience was in 1988 when we had this massive drought in the midwest. very strong participation has helped offset the losses. as of february 11, about $14.2 billion in indemnity payments have been made to producers of 2012 crops,. we think these indemnity payments will likely go higher, they could be as high as 15 or at $17 billion before we are done. on the other hand, looking at
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the livestock and poultry producers, they are facing very high feed costs for most of 2012, and high prices are likely to persist for much of 2013 until new crops become available in the fall. in addition to this high feed costs, producers have been hit by poor pasture conditions and the poor he crop, almost two thirds of the nation pastors -- pasture conditions declined. the u.s. cattle production was at its lowest level since 1952. it resulted in largo tradition of cattle numbers. the january 1 cattle report indicated that total cattle and
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calf numbers in kansas, oklahoma, and texas alone declined by 3.4 million heads between 2011 and 2013. the production is up 13.6 decline, and almost equals the net decline in the same treatment. likewise, producers have faced high feed costs and poor pasture conditions and higher temperatures during the summer, also adversely affecting milk production. net cash income for all livestock and poultry is forecast lower for 2013 for all livestock and dairy and poultry sectors. the costs make up 51% of expenses for derry, about 20% for the cattle, 42% for hogs and 35% for poultry farm businesses. 59%, the winter wheat area,
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remain under drought conditions. 43% of the winter wheat production is located in the areas under extreme or exceptional drought conditions, down only slightly from 51% in august. while that also implies that spring plantings could be affected by drought conditions, there have been some improvements in the eastern corn belt were many areas are no longer experiencing drought. assuming adequate participation is likely to have turn yields, if so, a rebuilding of stocks and at lower commodity prices would be expected in the fall. that is 2013. this should help relieve the prices. that concludes my testimony, i would be happy to answer any questions that you might have. >> thank you very much to both of our witnesses today. doctor glauber, let me start with you. if you could talk a little bit more about the financial impacts
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of the drought between sectors and the average livestock producers, specialty crop growers, can you tell us a little bit more in paint a picture? >> again, as you mentioned, there were a number of calamities that hit producers. if i can start with the drought, that certainly had most of the attention. because of the extensiveness of the drought and the severity of the drought, larger yield loss in most areas, and we haven't seen anything like this in the corn belt since 1980. certainly, the floods of 1993 were bad in so far is that his concern. with that, we saw record prices. they help properties is, because if you have a crop, in several areas of the country, the southeast it okay. drought conditions for most of
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the year, including the summer. but they did have timely rains, and they were able to get a crop and get a record deal in some areas. they were able to take advantage of higher prices. higher prices helped offset some of the losses. but when you two areas, and in addition as i mentioned in my testimony, very high dissipation rates with many of corn and soybean producers ensured that 70% higher and many of them ensuring with revenue products that indemnify at harvest prices. >> crop insurance made a significant difference? >> it did make a very significant difference. on the flipside, if you were not insured, then you were looking at yield losses and particularly for some specialty crops, where participation tends to be poor or there may not be anything other than not insured acreages
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for it the disaster program that -- and we know, for example, in your area in pennsylvania and new york -- as you mentioned, the warm and early spring, a lot of the crops flowered in the market with a devastating freeze. again, there were some losses. >> how long will it be until we have specialty crop insurance? >> we have faced some improvements there. as you know, i sit on the federal crop insurance board. we have seen several products, new products that have commented that have extended crop insurance to some specialty crops. we have made some changes with the cherry policy with revenue product. i think the overall liability for specialty crops is about
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$10 billion, 10 out of $13 billion, we would like to see that improve. the difficulty is that a lot of these crops are very small. not a lot of producers are not interested in crop insurance. what we have seen over the last five or 10 years, which is different than what we saw 15 years ago is a lot of reducers are interested in developing these products. i think there is some potential for these rainfall products and indexed products in more and more generic insurance products that could affect some of these producers that are vulnerable to specific risks, like freeze order other sorts of weather damages. >> as you know, and i care deeply about making sure that we can survive the same kind of crop insurance, we have a lot of producers that appreciate your
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work. all of our producers don't have crop insurance have access to it. i'd like to turn to doctor pulwarty and ask if the weather experience lester was normal. if not, you expect the same type of severe weather that we saw in 2012 to be a persistent problem in coming years? what about this year, what about the future and the volatility and the weather patterns? >> thank you for the question. eventually signed 2012 started at the end of 2010. the culmination of natural
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vulnerability had a significant impact on our reservoir systems in our crops. from the standpoint of looking at temperature relationships in the future, in the 1950s and 1930s and other periods in which we had high temperatures, we saw that it had a big impact that affected the size and the extent of the drought. 2012 was very unusual. but we are not finding a strong link from temperatures or other driving factors. but instead, when we jump from the month of may into summer, 30% up to 60%, was caused by a high ridge of pressure sitting over the united states, leading to much drier conditions. >> did i hear you say that you expect that this year as well? >> the continuing conditions really look like we are setting up some very similar levels of
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drought. especially the midwest and the south. since none of this is absolutely predictable by 100%, we are hoping for some alleviation in the late spring. a major issue in the midwest and southwest in particular, we are having back-to-back dry years. a third year that puts us at completely under stress levels. the forecast for this season is that, in fact, we are projecting drier conditions. >> thank you very much. senator akaka. >> madam chair, thank you so much. we are trying to figure out what practical consequences will be for sequestration and targeting of certain programs and cuts that will be visited on recipients of government program dollars that had been in the planning for some time. specifically, i want to ask
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about the agricultural disaster relief fund. it has been included in the accounts targeted for sequestration. can you tell us a little bit more about one specifically the dates for this sequestration can be expected or released one imposed, those who benefit from these programs, and exactly what the impact will be on contracts for relying upon the fact on the disaster relief fund and other compliance requirements. >> thank you, senator. i'm almost hesitant to talk about appropriations. as you know, we have a mandatory
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council and the discretionary council. my understanding is that we have been working omb with determination of what is under the mandatory shield and what would be affected by that. hopefully we will see some release of that information soon. now, in so far as the discretionary account, what you find is that as you are aware in terms of the agency budgets, a lot of those are salary based and there is some discrepancies. with the cost, there is not a lot you can do to avoid if you're talking about five or 6% cuts in terms of how you managed that. in so far as specific disaster prevention, i will have to get back with you on that and i would be happy to do so and follow up on that.
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in terms of the specific things like livestock provisions, those have been unfunded out of the 2008 farm bill, of course. but i can get back to you on the other account. >> it would be interesting to know what the administration's plans are. producers can plan and not be surprised totally at the last minute. that would be very helpful if you can supply us this information. >> sequestration is where we are trying to figure out what the practical consequences of that are. switching shifts, the congress specifies the level of appropriation for government
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programs and funding. and i think it was one of the nixon administration's where they came in and impounded funds and everyone in congress threw up their hands. we directed at this be spent. this is mandatory spending. we contrived these things that tell the administration in no uncertain terms that this is money to be spent. it is appropriate. it is mandated. it is spent. what is your reaction to that in this environment? as things change, but going back to government impoundment? and when do we know about it and how. how are you going about it with those programs that are going to have the funds impounded were sequestered. >> well, i remember not so fondly these days and cuts that
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went in place back in the 1980s. as i mentioned, my secretary has been working with omb. including what would be subject to sequestration. it won't be because of contractual relations and at least the lawyers feel that they do have the authority to sequester and i can get back with you anna. i agree with you on your point that the sooner the better, people have to make planning decisions. >> thank you very much. senator klobuchar. >> thank you,. it is very important to get this farm bill passed. including the disasters that you mention from the livestock disaster program to the
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conservation tools in our new farm bill. obviously, the crop insurance and the grazing operations and opportunities that we included for livestock producers as well as the agricultural resources that we have received. again, that is my basic reaction and i thank you for that. i want to ask specifically about how this could affect exports. i see this as one of our main ways in the economy right now, and that is increasing exports at $6.8 billion just last year. how did the increase in extreme weather allows to capture growing export markets better? >> thank you, senator. there is a certain counterintuitive result about exports, much like farm incomes. we came out -- new numbers for
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next week. but our november estimates show record export levels this year. corn, we just revise our estimates down for corn exports over the 2000 and 2014 years, to 900 million bushels. that's the lowest level since 1971. >> export values? >> that's right, that is correct. >> okay, very good. and the mississippi river transportation is my next question. in 2012, the barge traffic was greatly impacted by the drought. it is more difficult to transport grain abroad and especially upwards in minnesota, we were scared that they would have to stop barge traffic.
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can you talk about that a little and how this could impact our ability to save the our culture products that go down the mississippi? >> yes, we were very concerned as well about this. late december and early january, it looked like there could be a halt to the traffic. the mississippi, as you know, we stopped shipping because of winter weather. the best thing is that we got rain in the winter and at large traffic is now moving very well. i will say because of the lower corn harvest and soybean harvest and so much more grain is going to china, it was probably less stress than it might have been than say 15 years ago. but still, the best news is that we have adequate water.
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>> it is good that it was a close call, and it's something that we have to prepare better for next time. have a plan in place. what efforts is the usda taken to speed the adoption of such drought hardy varieties using conventional breeding? >> most of this is in private hands these days. there are a lot of profits to be made. my understanding is that we should be seeing some drought resistant and drought resistant strains come on the market in the next few years. that is an encouraging sign. the research continues to be very strong. largely private. we do some public research there, but most of it is coming from the public sector -- excuse me, private sector. >> during last year's drought, one of the concerns that i have heard is that emergency haying
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and grazing is only allowed in counties already impacted by drought. in other words, areas where the land is already dry? what steps the usda take to allow for emergency haying and grazing? >> well, you are absolutely right. it doesn't help you much if you allow haying and grazing when there is no pastor to speak of. i think we allowed about 2.8 million acres. there are restrictions on that in terms of nesting. right now we do it with disaster designated counties. i might add that with things like pastors, it doesn't help to have a pastor 1000 miles away that is in good shape. certainly we would be happy to work with you and try to improve
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the flexibility. remember this year, it was such an expensive area where you really are talking about 60 or 65% in drought conditions. >> a quick follow-up to the issue of the mississippi. upstream, about 20% of what comes into the basin and from the standpoint of how we look at monitoring, there is a strong effort in the conservation program. the idea of monitoring places around the world understand help us to understand what is happening mr. he. >> from that standpoint, i would really like to add to the issue, given the importance of
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transportation. in the context of other areas that are not only vulnerable, like brazil and other places, monitoring is critical. >> thank you. i am looking forward to you both coming to our convention in minnesota this weekend. >> okay, you got that plug-in there. okay. >> senator roberts, i said thank you for your service before you arrived. i wished wish you well with your new ranking membership. welcome. >> i would like to say that i'm looking forward to working with the leadership team. no chair of this committee, at least to my committee, and i have been around for quite a while, has worked any harder
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than our current chairperson. madam chairperson, i would like to thank you personally for all of your past courtesies. your staff working with my staff, difficult times that we have worked through, the committee hearings that we have enjoyed. especially your perseverance. i look forward to working with you in my college and my friend for over 20 years. my closing line is that the marines always depend on the navy if we are going to get anything done. >> thank you very much. >> they are the ones that bring us to battle, but that is beside the point. i really hope we can work
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together to determine what is mandatory and what is discretionary. i would point out that they were the only committee that stepped up in the last effort of savings. that was wrapped up in a five-year farm bill that we passed with 72 votes. they did their duty in regards to deficit reduction. but what is mandatory and discretion of torah, you know what we are talking about. if we can get that information, that would be helpful. we have sustained drought and another one coming. according to our renowned forecaster.
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kansas put seeds in the ground, many will fire up the tractor and planter and another six weeks. this is not due to a dollar short ad hoc disaster program. it is because they manage their risk and protect it themselves from disaster. many do not have a great safety net. the department under secretary vilsack for all kansas counties, including grazing on crp for the first time in 25 years. you don't do that unless you have a serious problem. this was a lifesaver for ranchers struggling to find a solution. i would like to thank all of the parties for allowing this to happen. according to the reports last year, over 9000 and grazing
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contracts allow the haying and grazing on 470,000 acres in kansas. that is a lot of acres. as we continue to experience drought, doctor pulwarty, if you could talk about la nina, that would be helpful. looking back to what we experienced in the 50s and 30s, can you relate to help fx 2013? >> certainly we have ari made some disaster declarations for counties in 2013. particularly for cattle producers, the next four or five months are extremely critical. want to be looking at is better pasture conditions. in the fall, better crop prices
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so that we get lower feed costs. but a lot of these producers have been hanging on with very tight or negative margins. over at 3.5 million down from two years ago in your region of the country. it is very critical that we get any help to the producers that we can get for them. we will be working with your office on that. >> i know you have in the past. we look for the same problems, unfortunately, today. northwest kansas produces irrigation and they must work to conserve their water. the current practices do not
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have fully irrigated or dry when practices. we need a mechanism to allow limited irrigation. i know that you know that. chairwoman has pointed out, time and time again, the more producers using risk management tools, the better off we will be. i'm interested in hearing your thoughts on how to improve this in an enormously successful program. you do not have to answer that right now. my time is expired and i will submit the rest of my comments for the record. thank you for your service. >> thank you. >> senator? >> thank you for holding the hearing, madam chairman. i would like to say thank you for the emergency haying and grazing. the lawrence county in colorado,
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a farmer said to me that he if he knew that he could have an extended period of time of crp lands, it would allow him to manage his summer grazing particularly well. we were able to take his voice to washington and the secretary responded to that. it sounds like we will have another year where we will need more of that. i am wondering, doctor, if you'd like to talk briefly about the value of the usda conservation programs for keeping our soils healthier. and giving producers this type of relief. >> there is no question, and i think particularly -- well, in a lot of areas -- [talking over each other] >> could you talk about how important it is to colorado? [laughter] >> and particularly in those areas, we are seeing dry
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conditions right now. things like emergency watershed protection program, which i think is very important. you look at the wildfires that are effective, colorado, as you know, we are limited in funding and we hope to restore some of these programs. but i think it's very important to mitigate and to help communities respond to these disasters. >> you raise an important point. we had the wp funds that was passed by the senate. appropriately so. because i think that we are still trying to deal with the effects of the disasters on our state. wildfires brought on by drought and other circumstances. as the former ranking member was saying, this is the only
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committee that did bipartisan deficit reduction in the last congress. it had the sense to think about things like mitigation of fire to save us money going forward, rather than making these cuts and deficit reduction knowing that we will have to deal with the disasters on the back and. i'm wondering if you have thoughts about that. you are an economist. >> these are clearly -- this has been a very successful program. to help communities, to organize, and to use mitigation efforts and relocation efforts that are necessary. it has been very important. hopefully we will find a financial solution. >> this is another case where the congress has an inability to act in real time.
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and it is absolutely painful. when this starts in colorado, which it inevitably will, we will watch these hillsides wash into our streams, it has effects on our producers. and it could be very significant. it is another case where people are playing games here instead of focusing on what is going on at home. doctor, i have never said this to a witness in any hearing that i have ever been to in congress. but i hope you are wrong. because we have now had two years in a row, and it sounds like we will have a third-year of drought in our region. i'm wondering if you could talk about the specific challenges that noaa projects in the western region of our country.
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>> thank you very much, senator. i hope that i am wrong as well. the state of colorado where i live, 30 to 40% of the water comes from the colorado basin itself. the colorado basin came in at 44% in the previous year. so far the snow has not had an impact that we would like it to. in some cases 40 or 60%. however, right now based on what's happening in the atlantic ocean, we are not projecting an improved set of conditions. the upper basin including san juan and places like that. >> actually know the dolores basin very well. the area in terms of the basin
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is experiencing similar precipitation, and is also experiencing a combination of high temperatures. something else that is happening in the basin has to do with some of our rural communities. so the combination is actually creating vegetation that holds our soil together. and the result is dust on snow, which lets the runoff and melt off earlier. from that standpoint, looking into the future, while we are seeing some improvement in the lower colorado basin of arizona and southern california and nevada, we are expecting that to be into april.
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we are not projecting the chicken new impetus nor must we get heavy rainfall than later in the spring. one of the reasons why that is the case is that when it has been dry for a year before, even when you get significant snowfall, a lot of that disappears because it is picked up. in 2005 we had 100%. but the runoff is 70% of what we expected because the springtime had been won. colorado is known as longest tenure. not on record. if we average, it has been 10% or less, and this is art in over allocated system as you know. i have only lived in colorado for 26 years, so i am a newbie.
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[laughter] the issue concerning the basin where 30 million people live in where we have seven states relying on the water, it is very much of the edge. the demand exceeds the supply. it doesn't take us long to put us into areas of content contention. some have stepped back and said, let's look at how we can effectively manage the situation. noaa is working with the river forecasts center in salt lake city and others to make certain that we are clear on what that looks like. to be perfectly honest, given the uncertainty, there are issues in our insurance. where the conservation reserve program come in his admission that we are uncertain about the
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future and it leaves us the flexibility. that is the richest contribution from the standpoint of what weather and climate is doing. >> thank you, madame jo. >> thank you very much. senator, welcome. >> thank you, madam chair. i am pleased to join this honorable committee today. the last time a massachusetts senator sat on the committee was in 1879. i am only a third senator to serve on this committee. so if you are wondering why i'm here, i want to tell you that we in massachusetts are not unfamiliar with our culture issues and the importance of our culture to this nation and the commonwealth. personally i have spent most of my childhood in north carolina on my great grandparents working on. everything that we ate was almost always grow more born on a farm.
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although massachusetts is not a corn or wheat belt state, it is an important producer for the nation. crops and jerry are the -- crops and dairy producing are very important to farmers, both experienced and new. the farmers and fishermen have a production of $7.2 billion in annual sales. i recognize some aspect of our fisheries are not in the jurisdiction of this committee. the fishermen who risk their lives to put food on the tables must be treated with the same respect as farmers across the nation. fishermen are struggling as well and are currently facing drastic stock reduction. many fishermen, through no fault of their own, are in dire straits. i will continue to push the provisions of the farm bill, and
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the other important farmers of this nation are pushing for disaster relief. we must make sure that farmers have the tools they need to manage risks and we protect our national environment for the future and we preserve programs to make sure that no child is forced to go to bed hungry. we also need to be thinking about new threats were farmers and fishermen that they are facing. climate change, and intense extreme weather that is threatening our economy. i am pleased that the committee is discussing this important issue today. according to the climate for mobility initiative, the united states is one of the top 10 countries that will be the most adversely affected by sealevel rise and this does not bode well for fishermen. i'm honored to join this committee and i look forward to representing the massachusetts
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senator is an farmers and fishermen to solve all of our challenges. i would like to ask a question to doctor glauber. as an economist, i have heard about the intense frequency of weather patterns and changing climate of the next 50 years. i'm wondering if you could tell us about your expectations of what that will mean in terms of our agricultural economy, both in the united states and globally to curb from the greenhouse gas issues. >> thank you very much, senator. just last week, the usda put out two major reports on climate change, looking at what the impacts of climate change would be on agriculture. there are among a number of findings, one that stands out as the variability in weather and the impact on agriculture from this sort of extreme that one
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might see because of increases in temperatures due to climate change. one thing we are working on at the usda, and this goes across in terms of agriculture, it is looking at adaptation strategies. i think these are going to be very important. clearly the forest service has a great history of putting an additional resources to look at that. and clearly as we face these sorts of pressures, agriculture will have to be able to adopt and have adopted strategies where they can help mitigate the impacts of variances in weather. the other thing is things that can be done to reduce carbon emissions.
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and in particular will we are looking at a lot of work done and there continues to be a lot of work done there and on conservation practices, which help reduce greenhouse gas emissions. >> thank you, doctor. thank you, madame jo. >> senator, i appreciate your advocacy for fisheries and that you do follow the distinguished steps of the senator and we look forward to working with you on those issues as well. one final question. from your perspective, are the long-term temperature changes from climate change affecting the length or the severity of drought like the one that we just saw last year? >> thank you for the question, senator. when we have seen high temperatures before, they have certainly helped the drought conditions. from the standpoint of what
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studies are showing, into the middle of this century, is about what we would really begin to see the stronger influence of temperature on the severity of drought. from the standpoint of what has recently happened, there is a lot to be learned about the relationship between temperature and the extent of drought. but it is too early to say if we can definitely ascribe a piece of this climate change and how much that would be. his climate changing? yes, it is. will temperatures affect the magnitude and to the long-term? we are anticipating by the middle of the century we would see that. was that the case in 2012, we cannot conclusively say so. but what we can say into the future is that the link between temperature and dry conditions -- the drought was caused by a
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lack of precipitation. from that standpoint it becomes even more important to develop an early warning system. when you add the background, it is not simply the addition of a drug event on a linear trend when those two are added together. in many cases, it produces a larger effect than what we anticipate. thank you. >> you very much. we have been joined by senator grassley. welcome. we are pleased to see you this morning. we will turn things over to you for questions. >> you are the only one. if you would like -- >> what i will do is we can continue to ask questions of our
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panelists. doctor, could you speak a little bit more. speak from a livestock perspective as to what has happened in terms of the severity of the drought that livestock producers have. also from a financial standpoint, they are trying to deal with everything that has been happening, including the rural communities. we are seeing facilities shutting down, the ripple effect of his. >> could you speak about that? >> absolutely. i speak to this and it makes it sound like everything is going great. but if you look at the livestock sector and over the last five years, the price spikes that we have seen, be someone the solomon 2007 and 2008.
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another spike in 2010 and 2011. this one caused by the drought. clearly when you talk about higher grain prices and higher soybean prices, this has a big impact on producers. we all remember the dairy industry and what went through in 2009. when you look at the poultry sector and the hogs sector, similar things in 2008. we are backing those marginal levels right now. the good news is that productivity for things like the hogs sector has shown great productivity and the dairy sector has shown production as well. it is marked by productivity, but there is no question that it doesn't matter what species you are looking at. they have been under very tight margins. particularly those who depend on pastor. that is the double whammy.
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you are looking at very limited pasture opportunities. to the degree that those things have impacted, as we mentioned earlier, these have been very tough times. hopefully if we can get a return to more normal yields on the soybean side, we should see softening towards the end of the year and hopefully spring rains to get past the conditions. thank you. ..

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